RETAIL: State boosts “business-friendly” grade to “D”

Darryl Hurt has two words to describe his first business venture. “Frustrating and tedious” refer to the thicket of state and local regulations he had to plow through and the fees he must pay to open a 6,200-square-foot restaurant called DDogs at 3557 University Ave. in Riverside.

A new nationwide survey on small business friendliness confirms that California is indeed a tough place to open a new business, but it’s better than the year before. The state improved to a “D” ranking in 2013, a slight upward nudge from last year’s “F.” The Inland region, Riverside and San Bernardino counties received a more respectable “C” grade.

The data was gathered by Thumbtack.com, a company that helps customers hire service professionals, in partnership with the Ewing Marion Kauffman Foundation, a nonprofit that advances entrepreneurship

The results stem from a survey of 7,766 small businesses questioned late last year via Thumbtack’s website about the ease of getting going, based on the support and friendliness of their states and cities. Among the questions included:

“In general, how would you rate your state’s support of small business owners?”

“Would you discourage or encourage someone from starting a new business where you live?” and

“Do you think you pay your fair share of taxes?”

Some of the key findings for California include:

Although the state struggled overall, it ranked above average for its online resources for small businesses.

The Bay Area was the top-rated region in California for the second year in a row, followed by the Central Coast. San Francisco was the state's highest ranking city, followed by San Jose.

Nationally, professional licensing requirements were more important to small business owners than taxes in determining a state’s overall business-friendliness, confirming the findings from last year’s study.

African-American and Hispanic small business owners were more likely than their white counterparts to encourage others to start a new business.

The top-ranking states overall were Utah, Alabama, New Hampshire, Idaho and Texas. The lowest rated were Illinois, California, Hawaii, Maine and, in last place, Rhode Island.

California's highest grade was a 'C+' for its small business training and networking programs, which boosted last year’s failing mark.

Within California, more than a third of small businesses rated obtaining and keeping health insurance as “very difficult.”

Sander Daniels, co-founder of the San Francisco-based Thumbtack.com, and Dane Stangler, director of Research and Policy at the Kansas City-based Kauffman Foundation, said it’s critical to the economic health of every city and state to create an entrepreneur-friendly environment.

After a year of remodeling an old pawnshop in a modern industrial style, Hurt and his business partner, Laurie Bower, are shooting for a June opening of their family-friendly sports restaurant, DDogs, which will serve gourmet franks, burgers and salads.

“Between the state and local fees, county’s health department inspection and enforcement of state and federal ADA rules, it makes it difficult to open,” Hurt said.

Even before the sports restaurant is up and running, Hurt said he must pay a $750 business tax. Without redevelopment money, the city is trying to make things easier, he said, “but there’s a lot of crossover state and federal regulations.”

The grade he’d award the state for business friendliness? “I’d give them a ‘D,’ he said.